The Confidence Game Is Failing

I guess we're beginning to see why gold rallied so sharply last Friday on the afterhours Globex. What we have here are the early stages of a global loss of confidence in the omnipotence of the central bankers planners. As confidence is the only "asset" backing their scheme, a growing loss of confidence is utterly devastating and this begins to lead the world back to the certainty of gold and silver.

Once again, events are moving very quickly so we'll try to sum up as best we can...

The big action overnight was the continued collapse of the USDJPY. It fell rapidly through 113 and 112 before reaching a low of exactly 111.00. This was the maximum pain and embarrassment that the BoJ could bear and they reacted quickly, with an enormous intervention of nearly 2 full points:

European sovereign risk is soaring and DeutscheBank, which just yesterday was "saved", is falling again while its Credit Default Swaps blow out to new highs!

The high yield junk bond market is falling again today, too. As you can see, the proxy for high yield junk...the HYG...is making new lows and is back to levels not seen since early in 2009.

So, getting back to the USDJPY...we're going to watch this closely. We told you Monday that there was no support until 110 and we told you yesterday that the BoJ would soon intervene. But we also told you that the "half-life" on whatever they did would be very short after the complete calamity of their NIRP announcement two weeks ago. Though the pair is currently 112.34, I still think it's heading to at least 110...if not 106! This means there is still all sorts of equity collapse and gold rally to come.

But now let's get to the fun stuff...gold, silver and the miners!

Not only has gold made a higher high versus October, with today's it has also made a higher high versus May! Not too shabby!!

And look at it on the weekly chart and against The Nemesis Line. IF GOLD CAN CLOSE ABOVE $1242 TOMORROW, I DON'T SEE HOW/WHY IT DOESN'T EXTEND TOWARD THE HIGHS OF LAST JANUARY NEAR $1310.

Which brings us to silver, which gold has "led" since the rally began back in late December (which you'll recall we predicted into heavy levels of doubt). It went something like this:

Gold double bottomed and then silver double bottomed.

Gold broke back above $1080 and then silver broke back above $14.

Gold started to break through its 50-day and 100-day MAs and then silver did the same.

Gold broke through its 200-day and then silver rushed to catch up and break its 200-day, as well.

Ah, but here we are. As noted above, not only has gold made new highs versus October, it's also made new highs versus May. And where is silver? It's still below its highs of October! So, will it soon rush to "catch up" again? Why wouldn't it?? IF gold holds and even extends here, why wouldn't silver extend sharply higher? To where? See below:

The HUI has made another new high today as it's currently up 10 points at 159. WOWOWOWOW!! If you want something to pull for today, watch to see it we can close above Monday's highs near 157. The would be a positive sign for the short term.

As I close, I've got $1242, $15.70 and a USDJPY of 112.12. Don't stray too far today. This is getting really interesting!

Gold in CAD$ is sitting at $1735 (up $68 on the day). It's been a while since we've seen that and I do believe that the last time Gold in CAD was in this range, our Loonie was close to parity with the USD. So .. it would seem that Gold does preserve your wealth through Central Bank currency nonsense.

Although I suspect that the banking cabal still has one last bull trap in store for the paper metal markets, by the time it arrives, the metal will be unavailable.

I will concede, I've been saying all along that there would be no action in the metals until after The economic collapse, but for all intents and purposes, that collapse has now arrived.

The public at large will not be notified until it is way too late to do anything about it. You've probably got between days and weeks left to stock up on preparations for what could be an extended period with absolutely zero commerce, and most probably, extremely high crime, mostly perpetrated by government agents.

There is no use saving any dry powder at this point, it is soon to be virtually worthless.

As we've mentioned...this is all HIGHLY UNUSUAL. Gold, silver and the miners can keep moving up simply because they have been so severely beaten down and the world is just now beginning to wake up to this fact.

Even from the coming CoT and technical extremes, price can continue to rally. There will, of course, be sharp pullback of profit-taking like what we briefly saw yesterday...but I think we all instinctively feel that something significant is happening.

I stated that every time they run short on funding, they announce that cancer is almost cured. Smoking is not addictive, sugar is not bad for you, wine makes you live longer, a recent study has suggested....blah blah

I have been listening to these imminent cancer cure announcements for 15 years...

With the meltdown in stocks sending investors scurrying to safety in gold, JPMorgan Asset Management's Robert Michele said Thursday it's a matter of faith in the metal, or the lack thereof in other assets.

"Gold at $1,200 an ounce, what does that tell you?" he asked rhetorically in a CNBC "Squawk Box" interview. "It tells you that in a flight to quality and a safe haven, people have more confidence in gold than in bank deposits or paper money. I think things have gotten out of control."

Out of control? Maybe out of the bullion banks' control? Maybe about out the central banks control. How appropriate for this morning's missive

I'm inclined to agree. You know when gold is the headline on Drudge, its pretty much the end of the game. I can't ever remember another rally in gold that made headlines, aside from when it was making all time highs in 2011. We are in uncharted waters.

My dog is having a convulsive nightmare while yellen is harping on in the background. The markets aren't fairing much better either. I hope she hasn't ingested a cane toad ( my dog, well dingo actually, Gigi - that is, not Janet). Yellen looks like a cane toad come to think of it.

Nice impression of her TF. Scary thing is that your impression is more eloquent than she is in reality.

One gasp away from new lows. If we do go to new lows today, this afternoon and tomorrow will be an absolute train wreck. Also, if we close the week at new weekly lows (pretty much a certainty unless the S&P can rally to 1880) then things are going to go to hell the next few weeks big time.

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